Big Slick
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- Joined
- Oct 18, 2004
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LCC Pattern Shift In New England
More Pressure on Southwest at MHT
[FONT=tahoma,verdana,lucida]http://www.airportsusa.com/images/pwm3.JPGWhile Southwest still has enough unique destinations from MHT to hold its own against BOS and PWM competition, it no longer has the luxury of being the dominant LCC in the region. jetBlue will be adding more nonstop destinations at Boston, which should further reduce the ability of Southwest to generate reverse-leakage from the Boston area to MHT and PVD.[/FONT]
[FONT=tahoma,verdana,lucida]Not News To Our Clients. As The Boyd Group's traffic trend forecasts were alone in predicting over two years ago, the rosy future for LCCs that most analysts have been spouting is little more than empty mantras. [/FONT]
[FONT=tahoma,verdana,lucida]The fact is that the future for LCCs isn't assured. Intra-LCC competition is taking root in New England, and this is just the start. This was first covered at our Annual Forecast Conferences, long before it manifested in the marketplace. New emerging trends will be discussed at this year's conference being held in Deer Valley, Utah October 8-10. For details, and to register, click here.[/FONT]
[FONT=tahoma,verdana,lucida]The [/FONT]Airports:USA[FONT=tahoma,verdana,lucida] forecasts for Portland and Manchester have been updated for subscribers. Not a subscriber? [/FONT][FONT=Tahoma, Lucida, Verdana]Click here[/FONT][FONT=tahoma,verdana,lucida] to learn more.[/FONT]
More Pressure on Southwest at MHT
[FONT=tahoma,verdana,lucida]On May 23, 2006 jetBlue will begin four daily A320 flights between Portland, ME and New York - Kennedy. This is big-iron flying. Lots of seats. Lots of low fares. And, as noted below, possibly another indication of challenges for Southwest.[/FONT]
[FONT=tahoma,verdana,lucida]PWM is a prime market for jetBlue. Approximately 25% of summer visitors to Maine are generated from points in Florida, and that represents new feed potential through the jetBlue JFK operation. While B6 currently does relatively minimal connecting at JFK, that situation will need to shift somewhat in the next 18 months as capacity and competition in the NE-Florida markets increases. (Don't bet on any reductions in service - even the recent shifts by Delta are not necessarily much to get excited about.)[/FONT]
[FONT=tahoma,verdana,lucida]Southwest Under Pressure. But the real message is the potential deterioration of Southwest's position in the Boston/New England marketplace. The initial strategy of straddling BOS with service at MHT in the north and PVD in the south initially made sense, as Logan essentially had no low fare service to speak of. [/FONT]
[FONT=tahoma,verdana,lucida]Enter jetBlue into BOS, and this started to change. Much improved ground access to Logan - which historically was about as convenient as navigating the Burma Road, also will be a factor in moving consumer preferences back to Boston. [/FONT]
[FONT=tahoma,verdana,lucida]The situation is not hard to define: jetBlue at Boston threatens much of the underpinnings of the WN traffic base at PVD and MHT. The PWM service will also deprivehttp://www.airportsusa.com/images/pwmbox1.jpg WN of some of the traffic it's now enjoying from Southern Maine. Conclusion: Southwest's peripheral airport strategy in New England is in question.[/FONT]
[FONT=tahoma,verdana,lucida]What this means for the players involved:[/FONT]
[FONT=tahoma,verdana,lucida]jetBlue will pick a significant amount of local New York traffic and flow traffic for its system. jetBlue obviously means business in PWM: it is dedicating A320's to the route as opposed to smaller E-190s. (A note on equipment selection: the assignment of the larger jets not only allow jetBlue to have the maximum market impact, it may also help with A320 rotations at JFK, while leaving the E-190s open to serve new cities in the South and Midwest).[/FONT]
[FONT=tahoma,verdana,lucida]Portland will see a clear re-establishment of traffic growth rates. On an annualized basis, look for almost 150,000 net new passengers per year for PWM. [/FONT]
[FONT=tahoma,verdana,lucida]PWM is a prime market for jetBlue. Approximately 25% of summer visitors to Maine are generated from points in Florida, and that represents new feed potential through the jetBlue JFK operation. While B6 currently does relatively minimal connecting at JFK, that situation will need to shift somewhat in the next 18 months as capacity and competition in the NE-Florida markets increases. (Don't bet on any reductions in service - even the recent shifts by Delta are not necessarily much to get excited about.)[/FONT]
[FONT=tahoma,verdana,lucida]Southwest Under Pressure. But the real message is the potential deterioration of Southwest's position in the Boston/New England marketplace. The initial strategy of straddling BOS with service at MHT in the north and PVD in the south initially made sense, as Logan essentially had no low fare service to speak of. [/FONT]
[FONT=tahoma,verdana,lucida]Enter jetBlue into BOS, and this started to change. Much improved ground access to Logan - which historically was about as convenient as navigating the Burma Road, also will be a factor in moving consumer preferences back to Boston. [/FONT]
[FONT=tahoma,verdana,lucida]The situation is not hard to define: jetBlue at Boston threatens much of the underpinnings of the WN traffic base at PVD and MHT. The PWM service will also deprivehttp://www.airportsusa.com/images/pwmbox1.jpg WN of some of the traffic it's now enjoying from Southern Maine. Conclusion: Southwest's peripheral airport strategy in New England is in question.[/FONT]
[FONT=tahoma,verdana,lucida]What this means for the players involved:[/FONT]
[FONT=tahoma,verdana,lucida]jetBlue will pick a significant amount of local New York traffic and flow traffic for its system. jetBlue obviously means business in PWM: it is dedicating A320's to the route as opposed to smaller E-190s. (A note on equipment selection: the assignment of the larger jets not only allow jetBlue to have the maximum market impact, it may also help with A320 rotations at JFK, while leaving the E-190s open to serve new cities in the South and Midwest).[/FONT]
[FONT=tahoma,verdana,lucida]Portland will see a clear re-establishment of traffic growth rates. On an annualized basis, look for almost 150,000 net new passengers per year for PWM. [/FONT]
[FONT=tahoma,verdana,lucida]Manchester - The Traffic Bloom's Fixin' To Fade. When Southwest commenced service to Manchester and started its traffic boom, the airport's catchment area for low-fare service extended from the Boston area up the I-93, as well as to some degree from Southern Maine and Coastal New Hampshire.[/FONT]
[FONT=tahoma,verdana,lucida]Now that jetBlue (and other carriers in BOS) have established closer-to-home alternatives, MHT's ability to draw this traffic has diminished. Add this to the fact that MHT traffic is suffering from the loss of FlyI as well, and you get an airport that should at best see traffic flat in 2006, and possibly through 2007 as well. (As a side note, we don't expect the new PWM service to have a noticeable effect on BGR traffic. These airports are far enough apart that their catchment areas do not overlap significantly).[/FONT][FONT=tahoma,verdana,lucida]http://www.airportsusa.com/images/pwm3.JPGWhile Southwest still has enough unique destinations from MHT to hold its own against BOS and PWM competition, it no longer has the luxury of being the dominant LCC in the region. jetBlue will be adding more nonstop destinations at Boston, which should further reduce the ability of Southwest to generate reverse-leakage from the Boston area to MHT and PVD.[/FONT]
[FONT=tahoma,verdana,lucida]Not News To Our Clients. As The Boyd Group's traffic trend forecasts were alone in predicting over two years ago, the rosy future for LCCs that most analysts have been spouting is little more than empty mantras. [/FONT]
[FONT=tahoma,verdana,lucida]The fact is that the future for LCCs isn't assured. Intra-LCC competition is taking root in New England, and this is just the start. This was first covered at our Annual Forecast Conferences, long before it manifested in the marketplace. New emerging trends will be discussed at this year's conference being held in Deer Valley, Utah October 8-10. For details, and to register, click here.[/FONT]
[FONT=tahoma,verdana,lucida]The [/FONT]Airports:USA[FONT=tahoma,verdana,lucida] forecasts for Portland and Manchester have been updated for subscribers. Not a subscriber? [/FONT][FONT=Tahoma, Lucida, Verdana]Click here[/FONT][FONT=tahoma,verdana,lucida] to learn more.[/FONT]
